tv Nightly Business Report PBS February 9, 2016 7:00pm-7:31pm PST
the nightly business report with tyler math son. >> the force awakens disney's results, but does the company need more than blockbuster movies to keep its shares climbing? >> utility stocks are the best performer sos far this year. they'vds what can go wrong? plenty. >> going to the polls. why the number one issue on the minds of new hampshire voters maybe neither jobs nor the all that and more tonight on nightly business report for tuesday, february 9th. >> good evening, everyone and welcome. the force was strong. disney reported its best quarter ever. profits hit record levels thanks to the global success of its
latest star wars movie and all that merchandise tied to it. the company earned a buck 63 a share. expectations were for 1.45. that's a 28% profit gain from last year. revenue, up to 15 billion. also better than expected, a 14% increase from a year ago. despite the strong results, disney reported a drop in profit at its cable networks and that may have pressured shares in after hours trading. julia boorstien spoke to bob iger. >> disney results beating on the top and bottom line. driven in large part by its movie studio and the success of star wars the force awaken, bringing the movie studio its first ever quarter with over a billion dollars in earnings. bob iger saying it wasn't just star wars . that they're seeing success across the board. >> we also had over 20% growth
from parks and resorts and kuler products, but media was down because of the timing of college playoffs. we had four businesses that had a good quarter. good quarters. these are historic numbers for the company. the highest quarter in the history of the company, so it was just a fantastic quarter for us. >> iger saying he's not concerned about recent global economic volatility, but confident that thanks to the investments disney's been making that the company will be able to continue to deliver strong results. back over to you. >> thank you, julia. bill smeed is a long time shareholder of disney and joininging us to give his outlook of the economy. his investment officer of his own firm. bill, good to see you. welcome back >> thanks for having us. >> start with your take on the results.
bob iger thinks they're pretty good. >> what they do is cultivate and sometimes buy brands that are targeted around being the most successful baby silting organization on the pl is born states and now, many other countries and they're automatically a customer. a sports fan where they have something like 200 million viewers, i think bob iger said today, each year in the united states alone. where they babt males and many adult femal. so, it's a great, long duration story, but what you've got here is people are just doing their math and they know that you climb to the top of the mountain with star wars. and in that particular division, the film division, it's going to be dif and the history of their stock is coming off the top of that
the normal progression a whil of doing what they do so well, kicking back into gear, so, it fe though you're basically saying for the long-term investor, this would be a wonderful core holding. >> yeah, it's a great core holding. if you've never owned it before, it's a time to begin working your way into it and if you own it, it may be a time to have on weakness and again n ten years, you'll be really preezed that you did. here a thing that's sbreing. a lot of people have been wondering what people are spending their gasoline savings on. well, how about driving to the park. their parks and driving to the movie theatre and then saving money on top of that on their driving because the gasoline cost is down so much. >> right, we should note that you've been a long-term holder of this disney stock between nine and ten years. what about the global problems that are out there? disney is also opening its park in china.
europe. a lot of people say it's going back into recession. and they have a big park outside of paris as well. are you at all worried about their global exposure to contagion or recession? >> first of all, i think their parks in hong kong and the one that's going to open in shanghai are smaller than their u.s. and their paris park. so, let's say you need 30 million people to visit the first year. so they've got to get about 2% of the people in china to come visit. so, it's a different world. and that's what all of us have to remember. we find us in the united states with companies ths 325 million people in the united states. you don't have to get all 325 million to visit the park. >> sometimes, if you've been to a disney park, you think you're all there. >> the day you're there, it seems like they're all there. >> on a scale of one to ten with ten being very worried, one not so worried, how worried are you,
a quick answer, about cord cutting. i.e., people not signing up for the full bundle and maybe walk wag away from espn on a scale of one to ten. >> every time there's new major distribution channels in entertainment, be it the vcr, the cable, et cetera, netflix, et cetera, there's always a big panic that the new system is going to deflate the industry and content always wins in the long run. and disney is the conten. >> okay, so you're not worried there. bill sneed. >> all right, disney's fellow saw its profit rise more than expecteded. the world's largest beverage maker said unit volumes world wild up 2% in the final three months of last year. growth in sales of sprite and coke zero off set a decline in diet coke. despite the better than expected results, the chief operating officer says he sees challenges ahead. >> clearly, there are some
markets under pressure, whether that's you know, brazil, russia, china, some of the oil exporting countries in the middle east. we see continued pressure and volatility. but we've got a long track record of managing through volatility by focusing on our long-term game plan. >> and in tradinging today, shares of coca-cola were up 1.5% to 43.30. on wall street, stocks closed relatively flat, but that does not begin to describe the trading day which saw the dow t whe the closing bell rang, the dow jones industrial average fells smallest loss this year. the nasdaq dropped 15. s&p 500 was off one. despite the lousy market, utilities have been hot, as investors look to stocks with decent yields, so-called safer investments can carry a lot of bob pisani explaining what could go wrong. >> utility rs the best
performers of the year. there's a couple of rea everybody's sot hot for utilities. first, they're a yield play. most utilities have a 3 to 4% dividend yield which are looking more attractive as bond yields have been dropping so far this year, but be careful. these stocks have a long history of dropping fast when the markets think interest rates are going up. will rates go up? it's hotly debated, but a real risk. investors believe utilities are a safe play. the stocks could go down. for these to keep going up, you have to assume rates will keep moving lower and you have to assume that investors will keep i fleeing e bro market. these are big asummits and it's likely one or both won't happen. leaves me with my last problem with utilities. the pe value rs at or near historic highs. most north of 20 for a utility, wow, so, enjoy the moment that utilities are having, but be
careful. i'm bob pisani at the new york stock exchange. >> it isn day in new hampshire. a half million voters trudging through snow and skidding on ice to cast ballots in the nation's first presidential primary. a record turnout is expected an. john harwood has more from manchester, new hampshire. >> tonight, nnds voters give us the results of their first in the nation primary and donald trump, who did not win the iowa caucuses, is poised to take first place here, if you can believe the polls. take a look at the polling averaging heading into election day. trump with a substantial lead over a group of candidates, much for second place. he's around 30% below that level, rubio, kasich, the governor of ohio. ted cruz, jeb bush, former governor of florida, chris christie, all pushing for second place, hoping to get a burst of momentum here. on the democratic side, bernie
sanders, the other outsider candidate in this t forme secre state, hillary clinton. he's had a substantial lead in some polls as low 9%, others over 20%. both sides agree he's going to win. the question is whether or not hillary clinton can come close enough to slow his momentum on line is that we are headed towards extended nomination races as we move now to contests in south carolina, nevada and throughout the sou the united states. this is not what the party establishments on either side have wanted, but that's what the voters are handing us. i'm john harwood in manchester, new hampshire. for the first time since 2008, new hampshire residents see a bigger problem for the state than jobs and the economy. the number one issue on the mind >> america's heroin and
prescription painkiller especially deppic has become an issue. >> we have got to get a handle on thi disease knows no bounds. >> and for the white house. >> and heroin abuse? >> and perhaps nowhere is that more prevalent than in new hampshire. >> such a big problem. in fact, i hear it more here it any place in the country. >> a recent study found a quarter of new hampshire voters believe drug abuse is the most important problem facing the state. >> we are losinging a person a day in new hampshire from overdoses, so it doesn't surprise me to hear people say this is the biggest issue on their minds because it's ravaging families. hurting communities. obviously, there are huge costs. co o productivity from people who are not able to do their jobs because they're addicted. >> in fact, as much as 80% of employers are dealing with this issue. open yoid abuse costing the economy over $55 billion per year with nearly half of that
because of loss of workplace productivity. the obama administration is pay ing more and more attention to this problem. int for about $133 million for fighting drug abuse and now, much bigger figure. the president wants $1.1 billion in 2016 to better deal with the epidem epidemic. a big chunk would go toward increasing funding for treatment programs. >> the epidemic has become so severe, that it's possible now for policymakers and media or the public or voters in states with primaries to ignore the problem. >> for nightly business report. >> still ahead, rolling the dice. will the chinese new year bring good fortune to a city that's banking on
a bit of a warning from the international energy agency. in its monthly report, the organization says the global oil glut will likely grow even bigger throughout the year and added a production cut is unlikely and doesn't see how oil prices can rise significantly in the short-term. today, the price of domestic crude fell to nearly 6%. and it's those low oil prices that prompted petroleum to cut its dividend by more than 80% to five cents a share. the company said the move is ap a near record number of jobs were advertised in december and more americans quit. two signs the labor market couldn'ts to strengthen. the labor market reported more than 5.5 million job openings at the end of last year. the second highest level ever. ore than 3 mill paying position. the auto sector of the
economy has also been doing well, but with auto sales at record levels. no data though about loans are raising concerf a consumer. there's more borrowing by those with the weakest credit scores. and as phil lebeau reports, there are more loans going past due. >> with auto sales running at a record high, it's not surprising the amount of auto loans opened in the u.s. has soared. experian says americans now hold almost a trillion dollars in auto loans, with the biggest growth coming in the lower end of the market. , in inourth quarter of last loans to those with subprime credit ratings. the increase was even greater for deep subprime borrowers who have some of the worst credit records in the u.s. while there are more loans to those with poor credit histories, experian believes lenders are generally doing a
good job managing the risk. but are loans being repaid on time? the data is mixed. late last year, there were fewer loans a month past due, but an increase in two month delean gwensies. especially if the u.s. slides into a recession and unemployment rate rises. historically, that's when people start defaulting on their auto loans and more cars and trucks are repo successed. and to read more about rising loan auto loans, head to our website, nbr com. in washington, the president set to congress his final budget, copies arrived on capitol hill today. the budget proposes a record level of spending. more than $4 trillion. on everything from combatting cancer and global warming to fighting terror groups. eamon javers has been digging through. >> a big top line number is
$4.15 trillion. the amount of federal outlays the president would like to see in 2017. that's $3.64 trillion. that adds up to a budget deficit of about $500 billion. now, take a look at some of the highlights here. 2017.f this is sort of preside but when you look inside, what you'll see are items like he wants to double the funding for the sec and the sftc by 2021. he wants to impose a $1111 billion financial fee over ten years on the liabilities of large u.s. financial firms. he's also got $19 billion in there in spendinging on cybersecurity. over $11 billion in funding to hunt down terrorists. also a billion dollars for that moon shot to cure cancer. ann dollars to expand prescription drug abuse treatment access, so a whole lot of obama priorities in there, tyler. the question is whether republicans on capitol hill are going to do anything about it.
>> along those lines, he might be able to get the cybersecurity through, but some of those other items i think are going to run up against some resistance. so, how likely is to to go into effect? > i think you know, than that. the republicans on capitol hill have already done historic firsts here. they have snubbed the president's budget director. they are not going to hold a hearing on capitol hill with the head of omb, which is something congress has done every year since 1975. this year, republicans on the hill say they don't need to hear from president obama and his team on their budget. they've got this, they're going to pass their own budget and thank you very much, mr. president. >> talk about the $111 billion fee on the liabilities of the nation's bank. what would that cover and wouldn't that basically make banks less willing to put capital into the market in the form of loans? >> yeah, that will be one of the big questions about this.
what they're saying it's a seven basis point fee on the liabilities of large financial firms. the 10 o firms with assets of more than $50 billion, so the biggest of the big. but it's a big fee. $111 billion. obviously, all that money's got to come from the bank's pocket and they are not going to like >> thank you very much. from washington. viacom sees its profit drop 10% in its latest quarter. the company said weak ad sales and a steep operating loss at paramount pictures contributed. comedy central underwent a significant change last week when it named the new ceo as the new executive chairman. shares fell more than 21% today to 32.86. deutsche bank's co-c oeo aid remained stable amid hat the
concerns over the health of european banks. in a surprise memo, he said deutsche bank's balance sheet remains quote, rock solid. his comments failed to appease investors and shares fell a percent to 15.38. sears is accelerating its plans to close at least 50 more stores and consider additional staff cuts due to what the company calls a challenging holiday season. the retailer saw store sales fall by 10 bers. shares of sears fell nearly 9% to 15.25. the fast food chain, wendy's, reported better than expected earnings held by the new promotions and renovations. sales increased by 5% at its north american location, but investor, not impressed. shares were down to 9.71 and masko, which makes products for home improvement, saw its shares rise after the company issued higher than expected earnings.
the cab nen and plumbing segment had a five-point jump in sales. shares rose more than 8% on the day to 25.59. violence hits the streets of hong kong. clashes erupted in the city when authorities tried to remove illegal street vendors selling local holiday delicacies for the new year secelebration. the police fired warning s. threw bottles and trash at the officers. the violence is the worst in hong kong since 2014. chinese new year is big business in las vegas. but with the world'sing second e come to vegas this ing, will year? jane wills explains why the stakes are high for sin city and a number of gaming companies. >> vegas is putting it all on red this week, hoping the
chinese new year brings good fortune. the lunar new year is one of the top three or four moneymakers in las vegas, but last year, back ra, the game of choice for chinese high rollers, saw revenues in nevada for the holiday drop 24%. have they bought them? >> we're seeing declines. we're going to continue to see declines, but i think the match is bad. >> we think it will be flat. >> it's hard to measure how many chinese tourists come to las vegas since there are no direct flikts. >> or 70% of all chinese inbound flights to the u.s. had las vegas on their i ten yar. >> are you going to do any gambling? >> i think the brothers are doing that. >> overall, las vegas has been a bright spot for gaming companies. the large part is the low gas record 42 million visitors last year, but there are concerns that if the u.s. economy
falt it will hurt a city that's finally dug itself out of the the great recession, but so far, so good. as for r catering to the chinese, later this year, mgm resorts will open a new development in maryland, which also has an asian flare. >> there's a large chinese and really chinese vietnamese asian constituency that lives in and around the d.c. area, so we're going to target it highly. >> vegas will get a better idea of how this year's chinese new year is going by the weekend when those celebrating the year of the monkey will visit the capital of monkey business. >> have you been using it yet? >> it's been spent. >> have any good luck? >> yeah, we've been getting good luck so far, coming up, the gift of giving. find out who gave away the most money in 2015.
janet yellin delivers her testimony on the economy in o will report earn oogs after the closing bell and we will see if more people applied for mortgage loans on the drop in treasury yelds. that's what to watch wednesday. general motors and united auto workers are donating $300 million to help support the children of flint, michigan. it will address the growing needs of those affected by water contaminated with led. handful of americans gave away a lot of money last year, but total figure given to charity is the lowest in five years. robert frank explains, there was a notable decline from one group in particular.
>> the 50 most charitable givers in america gave away $7 billion last year, with five donating more than 300 million. and while that may sound like a lot, total giving by this elite group fell 30% from 2014 and marked the lowest total since 2010. that's according to the philanthropy 50. the big reason for the decline was a lack of te giving. in 2014, silicon valley tech tycoons gave away more than $5 t >> we had a very volatile stock market this year. past 12 months. sometimes, it's been up. sometimes, it's been down. often, it's been both in a matter of days. so, i think there was perhaps less confidence than there has been in past years. in the financial markets and of course, that carries through in how much people are capable or comfortable with giving to charity. >> the most generous people in 2015 were not household names.
the top giver was richard mellon scape, heir to the melon banking fortune who died in 2014. he left roughly 750 million to charity, giving much to congress causes. ranking second was john santicos, who ran a texas theatre chain and left about 600 million to a foundation after his death and michael bloomberg, the billionaire former mayor of new york and possible presidential candidate ranked third with 510 million. bill and melinda gates topped the list with their $1.9 billion gift to their foundation, but gave away another 272 million in mark mark zuckerberg and his wife made the most public pledge of 2015, vowing to give ut% of their facebook shares to an llc, but that was a promise, not a gift and the lly was not technically a charity. it took $32 million to be a top
50 giver that's career, is whether weak stock markets and falling tech fortunes will cause aing bigger drop in 2016. for nightly business report, i'm robert frank. >> still a lot of money. >> still a lot of money to give away. america's pretty generous overall. >> absolutely. that does it for nightly business report. thanks for watching. >> have a great evening, everybody and we will see you back her.
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